ODonnell On Politics
columnist: Jim ODonnell

Topic: Monetary Policy
SUBPRIME CREDIT PROBLEMS - IN A NUTSHELL - PART 2

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Subprime Credit Crises Is Just A Myth According To The Federal Reserve Or Happy Days Are Here Again

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by Jim ODonnell
(Libertarian)
Friday, November 30, 2007

Well folks I have replaced my market hat upon my head and return to the job of explaining the mess [Subprime Credit Crises] that we are all experiencing. In the intervening several days the good old government has been hard at work doing the voodoo that only they can do.

A stream of market commentators mostly members of the Federal Reserve Board, have arrived on the scene to allay our fears about any possible economic recession or stock market meltdown or even the bankruptcy of the largest bank in the world: Citibank. Ah ha, yes indeed everything is just fine say the usual suspects backed up by their mouth-pieces in the financial media.

First the government of Abu Dhabi, that huge power house in the Middle East has invested $7.5 billion into Citibank to save the day. Forget the fact that it was done using an 11% convertible preferred, which is proof that Citibank has a "junk" credit rating, don't think about that because now all is well in financial land.

Next comes a member of the Federal Reserve Board saying that, "have no fears, Wall Street can count on us to further reduce interest rates in December."

No mention is made that this is what caused all the problems, namely the housing bubble, in the first place. What is important is that the "cavalry" is coming to the rescue, and you can count on it. As a result the markets go the way that all "Wall-streeter's" had hoped. The equity market rises many hundreds of points, and the price of crude oil which was scraping up against $100 per barrel declines to almost $90 in just two days.

In the background you can hear the musical strains of "Happy Days Are Here Again" while most of those in the financial media begin to hug each other and congratulate each other on their financial acumen once again.

Now poor ODonnell racked his brain trying to think of some way to explain all this to those who may not have the time to follow the markets as he does. He was almost at the point of giving up the ghost until was found a little gem of a video of two British comedians explaining the current Subprime mess in current terms, in the manner of "Monte Python."

ODonnell was saved.

He therefore presents to you a video link which encapsulates just about all the madness of today's financial markets into a sketch which last about 9 minutes, I give you [click on name] YouTube - The Long Johns - Subprime .

Less anyone think that this comedy routine is not accurate, I caution you that this is exactly how these jokers put together multi-billion dollar investment deals and also invest your retirement funds in the safest possible securities.

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2007 Jim ODonnell, all rights reserved.
Published: Friday, November 30, 2007
Last modified: Friday, November 30, 2007

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